Siemens Equity Story Siemens Investor Relations, 1 st Quarter 2018

Transcription

1 Siemens Equity Story Siemens Investor Relations, 1 st Quarter 28 Unrestricted Siemens AG siemens.com

2 Notes and forward-looking statements This document contains statements related to our future business and financial performance and future events or developments involving Siemens that may constitute forward-looking statements. These statements may be identified by words such as expect, look forward to, anticipate, intend, plan, believe, seek, estimate, will, project or words of similar meaning. We may also make forward-looking statements in other reports, in presentations, in material delivered to shareholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Siemens management, of which many are beyond Siemens control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the chapter Risks in the Annual Report. Should one or more of these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of Siemens may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statement. Siemens neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. This document includes in the applicable financial reporting framework not clearly defined supplemental financial measures that are or may be alternative performance measures (non-gaap-measures). These supplemental financial measures should not be viewed in isolation or as alternatives to measures of Siemens net assets and financial positions or results of operations as presented in accordance with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe similarly titled alternative performance measures may calculate them differently. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Page 2

3 Our company Why to own Siemens shares? Strategy: Stringent Execution of Vision 2020 Financial performance Page 3

4 What we stand for Our mission Page 4

5 Siemens Innovating the Electrical World with focus on the areas of electrification, automation and digitalization (E-A-D) Global trends Digital transformation Networked world of complex and heterogeneous systems Urbanization Infrastructure investment needs of urban agglomerations Climate change Higher resource efficiency in an all-electric world Globalization Global competition driving productivity and localization Market development FY (illustrative only) Digitalization Automation Electrification CAGR: ~8% CAGR: ~3% CAGR: ~1-3% Demographic change Decentralized demand of a growing and aging population Today Time Page 5

6 Siemens businesses Power and Gas (PG) Offers utilities, independent power producers, engineering, procurement & construction companies (EPCs), and oil & gas customers a broad spectrum of products and solutions for the resource-saving generation of power from fossil fuels and renewable sources of energy and for the reliable transport of oil and gas. Energy Management (EM) One of the leading suppliers of products, solutions and services for the reliable and intelligent transmission and distribution of electrical power. The portfolio ranges from systems for the low-voltage and distribution power grid level to smart grids and energy automation solutions to power supplies for industrial plants and high-voltage transmission systems. Building Technologies (BT) World market leader for safe, energy efficient and environmentally friendly buildings and infrastructure. BT offers fire protection, security, building automation, heating, ventilation and air conditioning (HVAC) as well as energy management products and services. Mobility (MO) The volume of traffic and transported goods is growing everywhere. The Mobility division produces products to transport people and freight efficiently, safely and with environmental responsibility on the tracks, on the road, and by linking together different means of transport. The success factor is comprehensive know-how these allow the best use of infrastructure, increase capacity, and raise the quality of the overall travel experience. Page 6

7 Siemens businesses Digital Factory (DF) Offers a comprehensive portfolio of seamlessly integrated hardware, software and technology-based services to support manufacturing companies worldwide in enhancing the flexibility and efficiency of their production processes and in reducing the time to market of their products. The ultimate goal is the complete integration and digital representation of the physical value chain. The platform for this is called Digital Enterprise. Process Industries and Drives (PD) As a proven partner, we help customers go to market with their products much faster. Customers benefit from our future-proof automation, drive technology, industrial software, and services based on best-in-class technology platforms. We are advancing the digitalization of the process industry from integrated engineering to integrated operation and digital services. Siemens Gamesa Renewable Energy (SGRE) separately managed Leading supplier of reliable, environmentally friendly, and cost-efficient renewable energy solutions. The wind turbines offered by Siemens Gamesa Renewable Energy are a worthwhile investment from both a financial and an environmental perspective. Our wind power solutions deliver clean, renewable energy from onshore and offshore installations all over the world. Siemens Healthineers (HC) separately managed Siemens Healthineers enables healthcare providers worldwide to meet their current challenges and to excel in their respective environments. A leader in medical technology, Siemens Healthineers is constantly innovating its portfolio of products and services in its core areas of diagnostic and therapeutic imaging and in laboratory diagnostics and molecular medicine. Financial Services (SFS) The Financial Services Division helps enterprise customers implement investment projects by providing project-related and structured financing as well as leasing and equipment financing. The success of SFS is built on a unique combination of risk competence, technological expertise and financial solutions. Page 7

8 Fiscal 27 Key figures Key figures for Siemens (Continuing operations; in millions of except where otherwise stated) Fiscal 27 Fiscal 26 Volume Comparable Change in % Orders 85,669 86,480 (2)% Revenue 83,049 79,644 3% Profitability and capital efficiency Net income 1 6,179 5,584 Return on capital employed (ROCE) % 14.3% Liquidity Free cash flow 1 4,769 5,476 Industrial Business Revenue by Business Healthineers 16% Process Industries and Drives 11% Digital Factory 13% Mobility 10% 84,331 in m Power and Gas 18% Siemens Gamesa Renewable Energy 9% Energy Management 15% Building Technologies 8% Note: Percentages of Divisions based on Industrial Business (IB) Revenue; Difference between Siemens Revenue and IB Revenue are reconciliation effects to Consolidated Financial Statements (e.g. intercompany consolidation etc.) 3 Employees by region (Sep. 30, 27) Americas 20% Europe, CIS 2, Africa, Middle East (without Germany) 30% Germany 31% Revenue by region Asia, Australia 19% ~377k 83,049 Asia, Australia 19% Americas 28% in m Europe, CIS 2, Africa, Middle East (without Germany) 39% Germany 13% 1 Continuing and discontinued operations 2 Commonwealth of Independent States 3 With beginning of fiscal 28 part time employees are included to the full extent rather than proportionally. Prior-year information is presented on a comparable basis Page 8

9 Management Managing Board of Siemens AG Joe Kaeser Roland Busch Lisa Davis Klaus Helmrich Janina Kugel Cedrik Neike Michael Sen Ralf P. Thomas President and Chief Executive Officer Chief Technology Officer Chief HR Officer Chief Financial Officer Governance and Markets Communications Legal and Compliance CIS 1 Middle East Building Technologies Mobility next47 Amerika Power and Gas Power Generation Services Africa Europe Digital Factory Process Industries and Drives Human Resources Asia, Australia Energy Management Global Services Healthineers 2 Siemens Gamesa Renewable Energy 2 Controlling and Finance Financial Services Corporate Development Corporate Technology 1 Commonwealth of Independent States; 2 Separately managed Page 9

10 Our company Why to own Siemens shares? Strategy: Stringent Execution of Vision 2020 Financial performance Page 10

11 Why to own Siemens shares? We execute and deliver now & in the future We offer good return We have a compelling strategy We have a strong ownership culture Page 11

12 1. We execute and deliver now & in the future Vision 2020 Guidance to market Ongoing cost productivity ~ 3bn ~ 4bn ~ 4bn FY 24 FY 25 FY 26 FY 27 FY 25 FY 26 FY 27 Underperforming businesses Profit margin 1% 3% ~6% -3% FY 24 FY 25 FY 26 FY 27 ~80% in range Project charges ( bn) FY 24 ~1.2 Avg. FY ~0.7 FY 25 ~0.2 FY 26 No negative net impact FY 27 <0.2 Employee profit sharing ( m) FY 25 FY 26 FY 27 Total Page 12

13 2. We offer good return 2) Dividend yield of 3.0% 60% 40% 57% 50% Continued dividend increases Payout ratio: 40-60% of net income 38% 52% 49% 2) ) % p.a FY 23 FY 24 FY 25 FY 26 FY 27 Dividend payout ratio Dividend per share Page 13 1) Effect of OSRAM stock distribution to shareholders of 2.40 per share; not reflected in dividend payout ratio 2) Payout ratio & Dividend yield data as per Jan 31, 28: 817m shares outstanding

14 2. We offer good return Value creation for all stakeholders Committed to share buyback bn Siemens profit sharing Endowments in m 2) 400 Up to 10bn share buyback within seven years up to 3.0 open volume FY 25 FY 26 FY 27 Total 1.5 Strengthen ownership culture through share distribution Target group: Employees excluding management CY 22 CY CY ) Significant increase of global employee shareholders to achieve goal of 200,000 1) Status by Jan 31, 28 Page 14 2) Does not reflect P&L-impact; related to performance in respective year

15 3. We have a compelling strategy Clear strategic imperatives Biggest software business in the space Page 15 Building NEXT GENERATION Healthcare Siemens the REAL Digital Enterprise Comprehensive Integrated Unique Creating a leading Mobility Player

16 4. We have a strong ownership culture >186,000 employees own Siemens shares Mandatory share ownership for Top Management Attractive share matching for employees Compelling management incentive plan fully aligned with capital market forces Open performance reviews based on WHAT and HOW including 360 feedback Always act as if it was your own company Page 16

17 Our company Why to own Siemens shares? Strategy: Stringent Execution of Vision 2020 Financial performance Page 17

18 Siemens Vision 2020 execution well advanced FY 28 Setting direction for next strategic level Value Vision Drive performance Secure competitiveness in PG, PD and SGRE Agility and continuous productivity improvement Stringent project execution Strengthen core Healthcare IPO Setting up Siemens Alstom Successful integration of acquisitions Scale up Customer and market focus Digitalization at work Innovation push Ownership culture driving leadership and people development Strategic direction Operational consolidation Optimization Accelerated growth and outperformance Page 18

19 Siemens Vision Execution well underway, most targets already achieved by FY 27 GOAL INTENT KPI 1 Implement stringent company governance with effective support functions Live lean governance and drive continuous optimization 1bn cost savings by FY 26 achieved 2 Strengthen portfolio Sharpen our business focus in electrification, automation, and digitalization Tap growth fields > 8% margin in underperforming businesses 3 Execute financial target system Grow our company value 15-20% ROCE Growth > most relevant competitors 4 Expand global management Get closer to our customers and markets > 30% of Division and Business Unit management outside Germany 5 Be a partner of choice for our customers Foster an intimate and trusting partnership with our customers 1 20% improvement in Net Promoter Score 6 Be an employer of choice Unleash the full potential of our people > 75% approval rating in leadership and diversity in global employee survey 7 Foster Ownership Culture Ignite pride and passion for Siemens, through a new mindset and equity ownership 50% increase in number of employee shareholders Page 19

20 Executing Vision 2020 Continuous productivity drives operational performance Drive performance Gross margin improvement on track Ongoing rigorous total cost productivity in % of total cost base 1) 28.6% 28.9% 29.9% 30.1% ~ 3bn ~ 4bn ~4% ~5% ~ 4bn ~5% FY 24 FY 25 FY 26 FY 27 FY 25 FY 26 FY 27 Stringent project execution continues Net impact in bn FY 22 ~1.2 Avg. FY FY 24 ~0.7 FY 25 ~0.2 FY 26 Sales FY 27 Excellence No negative net impact <0.2 PLM and Innovation Production and Logistics Cost and Value Engineering ahead of plan in bn, total production cost 2.3 FY Project FY 26 Business 7.2 >12 FY 27 Service FY 2020e Business Target 1) Total cost base: Sum of cost of sales, R&D and SG&A expenses Page 20

21 Executing Vision 2020 Underperforming businesses show clear progress Drive performance Underperforming businesses (~ 15bn revenue in FY 27) Fiscal Year e Example: Intelligent Traffic Systems Business Profit Margin -4% -3% +1% +3% ~6% >8% Fiscal 27 achievement ~80% In 6% range Order growth (organic) +13% Profit margin ~20% Under special management attention FY 26 FY 27 ~+800bps since FY 23 Page 21

22 Setting the course for renewable energy, mobility and healthcare businesses for long-term value creation Strengthen core 1 Areas of growth? 2 Potential profit pool? 3 Why Siemens? 4 Synergetic value? 5 Paradigm shifts? Stake of 17.34% sold Merger closed Siemens 59% share Successful IPO achieved Siemens 85% share BCA signed Page 22

23 Healthineers Strategy 2025 set up to ensure market leadership beyond 2025 Strengthen core Reinforcing Mid-term Upgrading Mid-term and beyond New growth Strategic posture Deliver on core business growth fundamentals and productivity Tap into adjacent growth markets "Market leadership 2025" Strategic priorities Page 23 Substantial next generation product and platform launches are gaining traction in the market, e.g., CT SOMATOM go, Artis Pheno, MR MAGNETOM Vida Atellica Solution and Atellica 360 Teamplay and Digital Ecosystem Execute on productivity initiative (>4% productivity increase p.a.) Digital, Data, and AI Precision Medicine Therapy of Tomorrow Patient Journey Steward Technology Enabled Services move into

24 Leadership in Digital Enterprise strengthened Siemens further gaining market share Scale up Revenue FY 27 Market CAGR FY18-22 Strategic direction Digitalization Leader Automation Global #1 Siemens software ~ 4.0bn Enhanced automation ~ 19bn Digital services ~ 1.2bn MindSphere IoT operating system Classic services +20% 1) ~+8% ~+3% Strengthen leadership in the Digital Enterprise across all Siemens domains Expand #1 position and utilize for digitalization Electrification Leader Enhanced electrification ~ 43bn ~ 17bn +1-3% Differentiate through enhanced offerings with automation & digitalization Note: Figures based on Industrial Business; SGRE incl. as of Apr 27 1) Nominal growth FY16 to FY17, rebased Note: 9% growth for Siemens Software excl. Mentor Page 24

25 Our Digitalization offerings separate us clearly from competition Scale up Deep domain know-how in broad range of markets and industries Strong installed base / connected fleet Unmatched Digital Enterprise portfolio: Industrial Software, Automation, MindSphere, Communication, Security, Services Numerous use cases as proof points Powerful ecosystem Page 25

26 Digitalization - Numerous use cases as proof points Scale up Please click on one of the below pictures to watch exciting video clips on how Siemens drives digitalization on full speed More about Digitalization Find out more about the digital solutions that Siemens is today already able to offer the world of tomorrow for more efficiency, sustainability and security. Page 26

27 Siemens with long-standing #1 position in automation combined with the power of Siemens Software Strengthen core Siemens Software virtual world Siemens automation physical world O R S I ** SIMATIC* Totally Integrated Automation TIA* Desigo CC* Spectrum Power ADMS* * In-house developments/digital upgrades ** Cooperation Page 27 27

28 Innovation Our digital portfolio Scale up Data analytics Design Operate Service Artificial Intelligence Siemens Software Siemens Digital Services Simulation tools Cloud and platform Secure connectivity Cyber- Security MindSphere the IoT operating system Digitally enhanced Automation Digitally enhanced Electrification DIGITAL TWIN (PRODUCTS + INFRASTRUCTURE) Page 28

29 MindSphere the cloud-based, open IoT operating system from Siemens Scale up MindApps Open ecosystem of applications Apps from Siemens, manufacturers, operators and app developers MindSphere MindSphere Various cloud infrastructures: Public, private or on-premise Operational data integrated with the Digital Twin to optimize simulation and engineering (model-based analytics) MindConnect Installed base of millions of devices Open standards (e.g. OPC UA) for connectivity Secure plug-and-play connection of Siemens and 3rd party products Page 29

30 Executing Vision 2020 Push for innovation drives competitiveness and customer value Scale up Higher R&D intensity continues R&D expenses in bn (% of revenue) ~+40% 6.2% 5.6% FY 24 FY 27 ~5.6 FY 28e and delivers impressive outcomes Healthineers Magnetom Terra first 7 Tesla MRI scanner for clinical use Unmatched visualisation of neurological disease states Digital Factory Expand portfolio with NX-Software for Additive Manufacturing One system for whole model driven workflow Core technology fields, e. g. Artificial intelligence IoT operating system MindSphere Digital applications and services across all businesses Innovative Healthineers Imaging platforms Decentralized energy systems Power and Gas HL-Class gas turbine derived from proven H-Class design >63% efficiency in CCPP mode with clear roadmap to 65% Page 30

31 The next generation of innovation an independent unit for startups Capital volume Capital combines the speed and agility of an independent investor with the breadth of Siemens businesses and technologies. The unit doesn t just fund startups; it also connects entrepreneurs with industry experts and a global ecosystem. Create Key technologies Catalyst 1 billion for five years Siemens target markets Artificial Intelligence Virtual reality Robotics and drones Additive manufacturing Innovation areas Energy Infrastructure Industry Page 31

32 Sustainability Siemens aims to be net-carbon-neutral by 2030 We are investing over 100 million in measures to reduce our carbon footprint Drive energy-efficiency program Increase energy efficiency in factories, employ sustainable technologies in new buildings 2.2 million tons CO 2-50% -100% Leverage distributed energy systems Reduce energy costs and CO 2 emissions Electricity 1.6 million tons CO 2 Reduce fleet emissions Utilize potential of low-emission cars in fleet, including electromobility Heating / Process heat Purchase green energy Move toward a significantly cleaner power mix with a strong focus on renewable energy and highly efficient gas Fleet Other Independent auditors will monitor and report on progress of implementation Page 32

33 Our company Why to own Siemens shares? Strategy: Stringent Execution of Vision 2020 Financial performance Page 33

34 One Siemens Financial Framework Clear targets to measure success and accountability Siemens One Siemens Financial Framework Growth: Siemens > most relevant competitors 1) (Comparable revenue growth) Capital efficiency (ROCE 2) ) 15 20% Total cost productivity 3) 3 5% p.a. Capital structure (Industrial net debt/ebitda) up to 1.0x Dividend payout ratio 40 60% 4) Profit Margin ranges of businesses (excl. PPA) 5) PG 11 15% EM 7 10% MO 6 9% PD 8 12% SFS 6) 15 20% SGRE 5 8% BT 8 11% DF 14 20% HC 15 19% 1) ABB, GE, Schneider, MHI, Eaton, weighted; 2) Based on continuing and discontinued operations; 3) Productivity measures divided by functional costs (cost of sales, R&D, SG&A expenses) of the group; 4) Of net income excluding exceptional non-cash items; 5) Excl. acquisition related amortization on intangibles; 6) SFS based on return on equity after tax Page 34

35 Siemens by the numbers Note: Financials as reported in annual report 27 in bn 86.5 Orders -2% 1) 85.7 in bn Revenue Target modest comparable growth +3% FY 26 FY 27 FY 26 FY % Industrial Business profit margin 1) +40bps 11.2% in bn Cost productivity of total cost base Target 3 5% p.a. ~4 ~4 ~5% ~5% FY 26 FY 27 FY 26 FY 27 1) All growth rates are comparable (adjusted for currency translation and portfolio effects) Page 35

36 Siemens by the numbers Note: Financials as reported in annual report 27 in Basic Earnings per Share +10% Capital Structure (industrial net debt / EBITDA) 1.0x 0.9x Target 1 FY 26 FY 27 FY 26 FY 27 in bn Free Cash Flow ROCE % 4.8 Target 15 20% 14.3% 13.5% FY 26 FY 27 FY 26 FY 27 Page 36

37 Siemens by the numbers - Profit Margin by Division FY 27 Note: Financials as reported in annual report 27 PG EM 7.5% 7.6% 11.4% 10.3% Profit margin target ranges 11-15% 7-10% BT 9.4% 12.0% 8-11% MO 8.7% 9.2% 6-9% DF 16.6% 18.8% 14-20% PD 2.7% 5.0% 8-12% HC 17.2% 18.1% 15-19% SGRE 4.3% 7.8% 5-8% SFS 21.6% 19.9% 15-20% Continuing operations; in millions of except where otherwise stated Page 37 Note: All numbers as reported; before adoption of IFRS Profit margin target ranges

38 Financial cockpit Q1 FY 28 Orders in bn % (+14%) 22.5 Comp. (nom.) Revenue % (+3%) 19.8 Profit Industrial Business (IB) in bn -14% % 11.3% Net Income in bn % 2.2 B-t-B Margin 13.2% 11.0% Q1 FY 17 Q1 FY 18 Q1 FY 17 Q1 FY 18 Q1 FY 17 Q1 FY 18 Q1 FY 17 Q1 FY 18 EPS in % ROCE ( all-in ) 15 20% Capital structure % 17.9% 0.7x 0.8x Q1 FY 17 Q1 FY 18 Q1 FY 17 Q1 FY 18 Q1 FY 17 Q1 FY 18 x.xx EPS excl. severance x.x% as reported x.x% excl. severance Page 38

39 Outlook FY 28 Earnings per share in +9% +2% Outlook We expect a mixed picture in our market environment in fiscal 28, ranging from strong markets for our short-cycle businesses to unfavorable dynamics in our energy generation markets, as well as geopolitical uncertainties that may restrict investment sentiment. For fiscal 28 we expect modest growth in revenue, net of effects from currency translation and portfolio transactions, and anticipate that orders will exceed revenue for a book-to-bill ratio above 1. We expect a profit margin of 11.0% to 12.0% for our Industrial Business and basic EPS from net income in the range of 7.20 to 7.70, both excluding severance charges. adj. EPS FY17 EPS excl. Severance FY18 Note: FY 27 weighted average number of shares of ~812.2m This outlook excludes charges related to legal and regulatory matters, effects on EPS associated with minorities holding shares in Healthineers following the planned IPO, and potential effects which may follow the introduction of a new strategic program. Page 39

40 Siemens a true dividend aristocrat Continued long term dividend growth 1) in % p.a. 2) 1 0 Page FY 1987 General remark: Dividend figures adjusted for Deutsche Mark/Euro conversion before 20 and several share splits 1) Effect of OSRAM stock distribution to shareholders of 2.40 per share; previous years adjusted for OSRAM spin-off effect 2) Adjusted for effect of Infineon & Epcos IPO FY 27

41 Investor Relations contacts Investor Relations Internet: IR-Hotline: Fax: Page 41